Loans At What Cost?
By: Eric | Posted: 10th May 2007
It’s a known fact that the present lending market is not as transparent as it claims to be. Although every bank and financial broker claims to offer the lowest possible rates, but, when you have to shrug up the final amount, it is always more than what was shown in the initial stage.
Very few lenders are upfront about the hidden fees charged from the customers. When the time comes to pay up, the harried customer always finds that he is paying almost double the amount quoted in the web sites or promotional matter of the company. Some of the common hidden fees that are levied by the banks on the consumers include arrangement and brokerage fees, and, legal and notary charges. Another way by which lenders try to amp their revenue includes PPI (Payment protection Insurance).
The concept of personal pricing has put paid to any kind of clarity in the entire loan deal. Applicants are absolutely clueless as to what interest rate is going to be quoted to them finally. To top it, lenders claim that interest rates are based on the applicants credit score. This statement has an ominous ring for consumers applying for unsecured personal loans.
In the absence of any mandatory collateral attachment in lieu of the loan, the applicant’s credit history is the only source by which the lender can gauge the repayment capacity of the loan seeker. As a rule, the interest rate is higher against unsecured personal loans in comparison to secured loans.
The best way to get the most cost appropriate loan deal is by shopping around from loans. But there is a restriction there as well. If consumers apply for alternative interest rates indiscriminately, there is a chance that they will be penalised. Consumers of course don’t have to pay money, but their credit score may be adversely affected. But, with time being of essence, borrowers have no other option but to go in for unsecured personal loans, no matter what the cost.
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